Turkey to set up bank in China

Turkish officials say they plan to open a bank in China as part of a deal that will also see a Chinese bank open in Turkey.

At the opening of the first Turkish-Chinese Business Forum in Istanbul on Thursday, Ali Babacan, Turkey's deputy prime minister and economy minister, said Turkey and China had agreed to open banks in each other's territories in a bid to strengthen financial co-operation between the two countries.

The news comes after the Bank of China, the country's third-largest bank, was earlier granted permission to open a branch in Istanbul. The name of the Turkish bank that will open in China has not yet been revealed.

Turkey will join a number of international banks that have already opened branches in mainland China. According to a report on foreign banks in China by PriceWaterhouseCoopers released last year, there are more than 30 foreign banks locally incorporated in China with the number expected to rise to 40 by the end of 2011. Foreign banks in the area benefit from better access to Chinese markets and the opportunity to build partnerships with local companies.

The deal will build on existing trade agreements between the two countries. At the last economic forum held in October, China and Turkey agreed to triple bilateral trade to $50 billion within five years and to $100 billion by 2020. According to the CIA Factbook, China accounted for 9% of Turkey's imports in 2009, its largest importer behind Russia and Germany. Turkey has also benefited from a revival in global exports led by China, with year-on-year growth in Turkey up to 10.3% for the second quarter of 2010, equalling China's growth for the same quarter.